Preferential attachment in multiple trade networks

Rachele Foschi, Massimo Riccaboni, and Stefano Schiavo
Phys. Rev. E 90, 022817 – Published 27 August 2014

Abstract

In this paper we develop a model for the evolution of multiple networks which is able to replicate the concentrated and sparse nature of world trade data. Our model is an extension of the preferential attachment growth model to the case of multiple networks. Countries trade a variety of goods of different complexity. Every country progressively evolves from trading less sophisticated to high-tech goods. The probabilities of capturing more trade opportunities at a given level of complexity and of starting to trade more complex goods are both proportional to the number of existing trade links. We provide a set of theoretical predictions and simulative results. A calibration exercise shows that our model replicates the same concentration level of world trade as well as the sparsity pattern of the trade matrix. We also discuss a set of numerical solutions to deal with large multiple networks.

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  • Received 10 November 2013
  • Revised 7 August 2014

DOI:https://doi.org/10.1103/PhysRevE.90.022817

©2014 American Physical Society

Authors & Affiliations

Rachele Foschi*

  • LIME, IMT School for Advanced Studies, Lucca, Italy

Massimo Riccaboni

  • LIME, IMT Schoool for Advanced Studies, Lucca, Italy and DMSI, K.U. Leuven, Leuven, Belgium

Stefano Schiavo

  • School of International Studies and Department of Economics and Management, University of Trento, Trento, Italy and OFCE-DRIC, France

  • *rachele.foschi@imtlucca.it
  • Corresponding author: m.riccaboni@imtlucca.it; Piazza San Ponziano, 6-55100 Lucca, Italy.
  • stefano.schiavo@unitn.it

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Issue

Vol. 90, Iss. 2 — August 2014

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